The BHP bid is thought to have been the most attractive with plans to buy out lenders to the power station by paying the holders of senior secured debt 70c in the dollar along with a $240 million facility for the power station to engage in energy trading.

Although financially sound the bid had unions up in arms and prompted threats of legal action from UK Coal, with claims that the bid could result in the loss of 9,000 jobs.

Part of the BHP bid includes a 15 year contract to supply coal to the station, coal that most likely would be sourced from the company's Colombian and South African mines, while control of the station would be handed to South African enterprise Eskom.

UK Coal currently sells 7.5 million tonnes of coal to the Yorkshire-based Drax station and claimed that the BHP bid could result in the closure of three UK mines.

However, the exclusive negotiations with International Power follow a revised offer that was sent to Drax's creditors last week. Drax has been on the market since defaulting on a massive $3.2 billion debt.

International Power said the total value of its revised bid remained the same as its original bid at $321 million, but it has raised its offer for A2-rated debt to 71 pence on the pound from 65 pence.

The offer, which includes 55 pence for B-rated debt and one pence for C-rated debt, will give International Power a stake of up to 38% in Drax.